SHK PPT(00016)2023-03-16 08:37Financial Performance - Group revenue for the six months ended December 31, 2022, was HKD 27,428 million, a decrease of 31.7% compared to HKD 40,153 million in the same period last year[7] - Profit attributable to shareholders (basic) was HKD 8,410 million, a decrease of 44.6% compared to HKD 15,186 million in the same period last year[7] - Revenue for the six months ended December 31, 2022, was HK40,153 million in the same period in 2021[50] - Gross profit for the period was HK19,900 million in 2021[50] - Operating profit for the six months ended December 31, 2022, was HK16,907 million in 2021[50] - Profit attributable to shareholders for the period was HK15,186 million in 2021[50] - Basic and diluted earnings per share were HK5.24 in the same period last year[50] - Total assets as of December 31, 2022, were HK745,191 million as of June 30, 2022[52] - Net cash generated from operating activities for the six months ended December 31, 2022, was HK4,016 million in 2021[53] - Cash and cash equivalents at the end of the period were HK17,830 million at the end of 2021[53] - Investment properties as of December 31, 2022, were valued at HK398,729 million as of June 30, 2022[52] - Total equity attributable to shareholders as of December 31, 2022, was HK601,946 million as of June 30, 2022[52] - Net profit for the period was HKD 15,186 million, with non-controlling interests contributing HKD 328 million, totaling HKD 15,514 million[54] - Exchange differences from the translation of mainland subsidiaries amounted to HKD 1,773 million[54] - Fair value gains on cash flow hedges were HKD 185 million[54] - Fair value losses on debt securities measured at fair value through other comprehensive income were HKD 31 million[54] - Fair value losses on equity securities measured at fair value through other comprehensive income were HKD 80 million[54] - Total comprehensive income for the period was HKD 18,034 million[54] - Net profit for the six months ended December 31, 2022, was HKD 8,410 million, with non-controlling interests contributing HKD 380 million, totaling HKD 8,790 million[55] - Exchange differences from the translation of mainland subsidiaries resulted in a loss of HKD 3,352 million[55] - Fair value losses on cash flow hedges were HKD 330 million[55] - Total comprehensive loss for the six months ended December 31, 2022, was HKD 4,610 million[55] - Property sales in Hong Kong generated revenue of HKD 2,881 million, with a profit of HKD 1,198 million[58] - Property sales in Mainland China contributed HKD 2,176 million in revenue and HKD 1,083 million in profit[58] - Property leasing in Hong Kong achieved revenue of HKD 7,429 million and profit of HKD 5,352 million[58] - Data center business reported revenue of HKD 1,108 million and profit of HKD 557 million[58] - Hotel business recorded a loss of HKD 82 million despite revenue of HKD 1,551 million[58] - Telecommunications segment generated revenue of HKD 3,809 million with a profit of HKD 391 million[58] - Transport infrastructure and logistics segment contributed HKD 2,051 million in revenue and HKD 604 million in profit[58] - Other businesses, including property management and department stores, reported revenue of HKD 4,128 million and profit of HKD 656 million[58] - Total consolidated revenue for the period was HKD 33,864 million, with a consolidated profit of HKD 14,618 million[58] - Revenue from property sales in Hong Kong for the previous period (H1 2021) was HKD 16,964 million, with a profit of HKD 7,012 million[59] - Property sales revenue for the six months ended December 31, 2021, was HKD 17,305 million, with no revenue recognized over time[63] - Property leasing revenue for the same period was HKD 1,024 million, with other income sources contributing HKD 9,418 million, totaling HKD 10,442 million[63] - Hotel business revenue was HKD 1,564 million, with HKD 881 million recognized at a point in time and HKD 683 million recognized over time[63] - Telecommunications revenue was HKD 3,792 million, with HKD 1,549 million recognized at a point in time and HKD 2,243 million recognized over time[63] - Transportation infrastructure and logistics revenue was HKD 1,819 million, with HKD 38 million recognized at a point in time and HKD 1,781 million recognized over time[63] - Data center business revenue was HKD 995 million, all recognized over time[63] - Property management revenue was HKD 2,487 million, with HKD 131 million recognized at a point in time and HKD 2,356 million recognized over time[63] - Department store business revenue was HKD 1,211 million, all recognized at a point in time[63] - Financial services and other revenue was HKD 355 million, with HKD 12 million recognized over time and HKD 343 million from other sources[63] - Total revenue from contracts with customers was HKD 30,209 million, with HKD 21,115 million recognized at a point in time and HKD 9,094 million recognized over time[63] - Interim dividend declared at HKD 1.25 per share, totaling HKD 3,622 million, unchanged from 2021[71] - Final dividend for the previous fiscal year approved and paid at HKD 3.70 per share, totaling HKD 10,722 million, unchanged from 2021[71] - Investment properties valuation increased to HKD 399,068 million as of December 31, 2022, from HKD 398,729 million on July 1, 2022, with additions of HKD 4,906 million and fair value decrease of HKD 348 million[73] - Completed investment properties in Hong Kong valued at HKD 257,481 million with a weighted average capitalization rate of 5.1%, while Mainland China properties valued at HKD 78,237 million with a capitalization rate of 6.5%[75] - Development properties in Hong Kong valued at HKD 29,587 million with a capitalization rate range of 3.0%-5.5%, and Mainland China properties valued at HKD 33,763 million with a capitalization rate range of 5.0%-8.8%[75] - Property, plant, and equipment additions amounted to HKD 2,779 million, including HKD 428 million for right-of-use assets, with disposals at a net book value of HKD 20 million[76] - Financial investments in equity securities at fair value through profit or loss increased to HKD 1,497 million as of December 31, 2022, from HKD 1,029 million as of June 30, 2022[77] - Total receivables decreased to HKD 3,726 million as of December 31, 2022, from HKD 5,234 million as of June 30, 2022, with first mortgage loans at HKD 1,419 million[78] - Trade receivables aged less than 30 days accounted for 63% as of December 31, 2022, compared to 83% as of June 30, 2022[79] - Contract costs capitalized amounted to HKD 482 million as of December 31, 2022, primarily related to commissions for property sales and telecommunications services[80] - Business payables increased to HKD 3,306 million as of December 31, 2022, from HKD 3,237 million on June 30, 2022, with 62% aged less than 30 days, 10% aged 31-60 days, 3% aged 61-90 days, and 25% aged over 90 days[81] - Total other payables and accrued expenses decreased to HKD 22,951 million as of December 31, 2022, from HKD 24,215 million on June 30, 2022[81] - Contract liabilities increased to HKD 817 million as of December 31, 2022, from HKD 658 million on June 30, 2022[81] - The company's issued and fully paid ordinary shares remained at 2,898 million shares, with a total value of HKD 70,703 million as of both June 30, 2022, and December 31, 2022[82] - Capital commitments for investment properties and property, plant, and equipment totaled HKD 7,068 million (contracted but not provided for) and HKD 4,576 million (approved but not contracted) as of December 31, 2022[86] - The company's share of joint venture capital commitments was HKD 2,826 million (contracted but not provided for) and HKD 4,338 million (approved but not contracted) as of December 31, 2022[86] - The fair value of financial assets classified as Level 1, Level 2, and Level 3 totaled HKD 1,296 million, HKD 220 million, and HKD 826 million, respectively, as of December 31, 2022[88] - The fair value of financial liabilities classified as Level 2 was HKD 616 million as of December 31, 2022[88] - Interest income from joint ventures was HKD 46 million for the six months ended December 31, 2022, compared to HKD 52 million for the same period in 2021[85] - Revenue from services provided to joint ventures increased to HKD 574 million for the six months ended December 31, 2022, from HKD 23 million for the same period in 2021[85] - The company's basic profit attributable to shareholders for the first half of the fiscal year 2022/23 was HK14.818 billion in the same period last year[94] - The profit decrease was mainly due to reduced property development profits and rental income in Hong Kong, partially offset by increased contributions from non-property and hotel businesses[94] - The fair value of debt securities decreased from HK644 million as of December 31, 2022[93] - The fair value of long-term bank loans and bonds decreased from HK106.423 billion as of December 31, 2022[93] - Hong Kong property sales revenue (including joint ventures) decreased by 83% to HK4.031 billion compared to the same period last year[97] - The company's unrecognized contracted property sales revenue (including joint ventures) amounted to HK8.772 billion compared to the same period last year[97] - The company's total revenue decreased by 26% to HK14.618 billion compared to the same period last year[96] - The rental income and net rental income of the mainland investment property portfolio, including joint ventures, decreased by 17% and 20% respectively to HKD 2.798 billion and HKD 2.218 billion compared to the same period last year[98] - The hotel business revenue increased by 3% to HKD 1.86 billion, and the operating loss decreased by 61% to HKD 63 million (after deducting depreciation expenses of HKD 325 million)[98] - SmarTone's revenue was HKD 3.809 billion, with an operating profit of HKD 391 million, driven by the growth of its 5G business and cost optimization measures[98] - The transportation infrastructure and logistics business revenue remained stable at HKD 3.886 billion, with operating profit increasing by 3% to HKD 799 million[98] - SUNeVision's revenue increased by 11% to HKD 1.108 billion, and operating profit increased by 10% to HKD 557 million, driven by increased demand for data center services[99] - The revaluation loss of investment properties, including joint ventures and associates, was HKD 1.206 billion, with a net revaluation loss of HKD 967 million after deducting deferred tax and non-controlling interests[100] - The net debt of the company increased to HKD 114.067 billion, with a debt-to-equity ratio of 19.2%, up from 17.4% due to capital expenditures in mainland China and Hong Kong[102] - The net finance costs before interest capitalization increased by HKD 517 million to HKD 1.821 billion, with the weighted average borrowing cost rising to 3.1%[103] - The total debt of the company was HKD 131.869 billion, with 76% borrowed through wholly-owned financial subsidiaries and 24% through operational subsidiaries[105] - The weighted average repayment period of the company's debt was approximately 3.9 years, with 16% of the total debt due within one year[106] - Total debt of the group increased to HKD 131.869 billion as of December 31, 2022, up from HKD 124.931 billion as of June 30, 2022, with HKD-denominated debt accounting for 81% of the total[107] - RMB-denominated debt accounted for 15% of the total debt, primarily used for financing ongoing property projects in mainland China[107] - Fixed-rate debt accounted for 34% of the total debt, including a RMB 2 billion commercial mortgage-backed bond issued in September 2022[108] - The group's bank deposits and cash stood at HKD 17.802 billion as of December 31, 2022, with 62% held in RMB to meet funding needs for mainland projects[112] - The group's net assets were approximately 20% denominated in RMB, with a HKD 4.2 billion exchange loss due to a 3.7% depreciation of RMB against HKD[110] - The group utilized derivative instruments with a total notional principal of HKD 18.557 billion to manage interest rate and foreign exchange risks[111] - Contingent liabilities amounted to HKD 2.157 billion as of December 31, 2022, related to guarantees for joint venture loans[114] - The group's financial resources include substantial unutilized credit facilities and steady cash inflows from property sales, ensuring liquidity and flexibility for future investments[109] - Total employee compensation for the six months ended December 31, 2022, was approximately HKD 6.889 billion before reimbursements[166] - The company will pay an interim dividend of HKD 1.25 per share for the six months ended December 31, 2022, unchanged from the previous year[168] - The record date for determining shareholders' entitlement to the interim dividend is March 10, 2023, with the ex-dividend date set for March 8, 2023[169] - The company did not purchase, sell, or redeem any of its listed securities during the six months ended December 31, 2022[170] - The interim financial results for the six months ended December 31, 2022, were reviewed by Deloitte Touche Tohmatsu in accordance with Hong Kong Standard on Review Engagements 2410[171] - The company complied with the Corporate Governance Code during the six months ended December 31, 2022, except for not separating the roles of Chairman and CEO[172] Property Development and Leasing - Total rental income decreased by 6% to HKD 11,927 million, and net rental income decreased by 9% to HKD 8,887 million, primarily due to the impact of the pandemic on the mainland rental property portfolio[14] - Profit from property sales was HKD 3,366 million, a significant decrease from HKD 7,658 million in the same period last year, mainly due to the completion of Hong Kong residential projects for sale in the second half of the fiscal year[13] - Added a total gross floor area of approximately 809,000 square feet to the land reserve, including the West Kowloon Cultural District Art Square Building project with 672,000 square feet of Grade A office space and 27,000 square feet of retail space[15] - Acquired a site near Anderson Road in Kwun Tong, developing a community shopping mall with a total gross floor area of approximately 110,000 square feet[16] - Total land reserve in Hong Kong as of December 31, 2022, was approximately 57.9 million square feet, including 34.8 million square feet of completed properties and 23.1 million square feet of properties under development[16] - Contracted sales for the period amounted to approximately HKD 13.4 billion, primarily from NOVO LAND Phase 1A and 1B in Tuen Mun and Wetland Seasons Bay Phase 3 in Yuen Long[17] - Plaza 228, a premium office project in Wan Chai, was completed with a total gross floor area of 122,000 square feet[17] - Total rental income in Hong Kong decreased by 2% year-on-year to HKD 8.772 billion, with an overall occupancy rate of approximately 96% for retail properties[18] - The retail portfolio covers approximately 12 million square feet, with Play Park, a 60